Question 1
Refer to the information provided in Figure 34.4 below to answer the question(s) that follow.
Refer to Figure 34.4. The demand and supply of pounds are
S
1 and
D
1. Which of the following can change the equilibrium exchange rate ($/pound) to $1.50 and the equilibrium quantity to 400 pounds?
◦ British purchases of U.S.-made cars increase
◦ United States purchases of British-made cars increase
◦ the price level in Great Britain decreases
◦ income in the United States decreases
Question 2
The J-curve effect refers to the observation that
◦ the trade balance usually gets worse before it improves after a currency depreciation.
◦ GDP usually decreases before it increases after a currency appreciation.
◦ the trade balance usually gets worse before it improves after a currency appreciation.
◦ GDP usually decreases before it increases after a currency depreciation.
The Serial Position Effect
Effect of an Exogenous Shift in Income
Chilling Effect of a Cold Current
The Coriolis Effect
A 1000-kg car is slowly picking up speed as it goes around a horizontal unbanked curve whose ...
Smoking’s effect on lungs